The new rates regime

Sebastian Fernandez 19 June 2014 69
household-rates

I don’t want to beat a dead horse, but I have to again raise that I’m extremely worried about the direction this city is heading in re household rates.

I’m a homeowner and I intend to stay in my house for a long time.

I understand that on average, Canberra homeowners move every 7 years, but I intend to be well above that average.

Those of us who do stay in a home for 10, 15 or 20 years will end up paying more than we did under the old system. We won’t benefit from the saving of the reduction in stamp duty.

I know this hasn’t been in the news cycle of late, but I think it should be.

We’re setting up Canberra to be one of the most expensive places in which to live in the entire country, if it isn’t already. Sure, you won’t have to pay that dastardly stamp duty when you buy a house, but if you’re got to pay 10K in rates every year, what’s the diff.

I still can’t believe that Andrew Barr’s only answer to this when questioned in a some Legislative Assembly committee, his only answer was get a higher paid job, or negotiate for more pay.

What planet are these people from.

I’m not a huge fan of Jeremy Hanson, or for that matter Zed Seselja, but I have to concur with their assertion that our rates will triple in around a decade. Where do you think rents will go ? In a city which is already way to expensive to rent in, it’ll just get worse.

How sad if we have hundreds of Canberrans who make the call to move out of town because they can’t afford to pay the rates.

I guess the big question is, could the Libs wind this all back should be elected, given that they’re going to be so busy ripping light rail out of the ground ?

 


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HiddenDragon HiddenDragon 5:22 pm 24 Jun 14

Maya123 said :

HiddenDragon said :

aussieboy said :

Abolishing stamp duty is very good policy.

You should not be rewarded for staying in the same house for 20 years – if anything you should be punished. There are far too many retired couples living in 4-5 bedroom houses in Canberra’s inner suburbs. Meanwhile, young families are pushed into the abysses of Tuggeranong and Gunghalin where facilities/services are lacking.

If retirees can’t afford the new rates, they should move into a smaller place.

In the long term, this won’t be an issue – basic economics suggests that house prices will fall to compensate for the PV of increased rates – people will just need to factor rate costs into their affordability calculations.

This policy isn’t going to make things any better for the young families who are currently “being pushed into the abysses of Tuggeranong and Gunghalin where facilities/services are lacking” – they’ll still be heading in that direction, and just paying a bit less for stamp duty when they buy, and somewhat more each year, for rates, for ever after. The desirable houses in desirable inner suburbs will continue to go to people with deep pockets – all this policy will do is make the total cost of buying such houses a bit lower if it’s a buyer’s market, and the seller’s net proceeds a bit higher if it’s a seller’s market.

If the ACT Government really cared about housing affordability they would take a different approach to the zoning, pricing and release of land – but they are heavily dependent on land revenues and cannot afford to do so.

The real financial issue at the heart of all of this is the level and sustainability of ACT Government spending, not how the land revenue component of funding for it is derived. The arguments about the supposed economic efficiency and fairness of the rates/stamp duty trade off is ultimately just diverting window dressing (“it has to be paid for somehow, so let’s not engage in selfish debates about who pays what”) and a quite clever exercise in divide and rule.

“facilities/services are lacking”. If that’s the case it’s more important that older people live closer to the facilities/services, as some might no longer drive, and the older the person generally the more things like medical facilities are needed. They also need to be closer to shops, or at least on a direct bus route to one. Older people are no longer as physically active and need to be closer to services. That’s probably why near where I live many of the government retirement homes have been built near to shops or on a bus route. Younger people, on average, need to visit the doctor less, are more capable of cycling/walking to the closest shops (surveys show most trips are five kms or less, and these distances are easy to cycle); they also are more likely to have a car and drive. The children can attend the nearest school, even in the outer suburbs. Any other school is a choice and the parents shouldn’t use that to complain about having to travel so far. It was their free choice. The people living in the outer suburbs can save, live frugally and when they get older move to a better location. I get the feeling that a lot of groaning from people who find they can’t get a place to live that matches the standard of accommodation they will accept in an inner suburb, is because they want to be able to walk to a perceived ‘fancy’ cafe area such as Manuka. The lack of facilities/services is just an excuse. Is there really that much difference in availability for schools, etc across Canberra.

In all of that, there’s actually an important point regarding the claim that the new rates system will “encourage” (wonderfully euphemistic) and facilitate the movement of older people to more appropriate housing. If the Government is serious about this, and wants to do it in a thoughtful way, they will be giving careful attention to the range of services available in the more affordable suburbs, and take care to ensure that the services are not just directed at younger families with dependent children. They could also look at what scope they have, through planning and zoning policies etc., to encourage a good range of housing options for down-sizers – there has been at least one recent, high profile instance which illustrates that not everyone sees small(ish) high-rise apartments near a group centre or town centre as an acceptable alternative to a free-standing home on a suburban block.

Maya123 Maya123 5:09 pm 24 Jun 14

watto23 said :

Maya123 said :

Watson said :

The only place I could afford to buy was a brand new 2 beddie on the very edge of town. Not only was it significantly cheaper than any other house for sale at the time, I also only had to pay a deposit on the land, not on the combined value of land and house.

Do I think I deserve to get cheaper rates as compensation for living there? Hell yeah! It’s a sh!thole.

So stop your complaining about your high rates in the Inner North or South. At least you can save money by cycling places or strolling to your local shops. You might even be able to take a bus to work and save on petrol and parking. You have parks and ovals you can walk to and good places to walk your dog. If you don’t like paying for those privileges, I’m putting up my house for sale in a few months time. You are more than welcome to put a bid on my shoebox and my rates are only about $1,000.

What my main gripe is with, is people here suggesting because I’m older I should sell my house (which I only moved into a year ago after saving for it for over twenty years) and move into a one bedroom unit. I liked Old Canberrean’s comment, “I suppose you are thinking of something small and comfortable like a coffin. What a ridiculous and heartless suggestion.”
No, I’m keeping my house, despite a certain section of the correspondents here believing anyone over a certain age is better ‘packed’ away, and the houses made available to real people. Those same people will be at retirement age one day and how will they feel then when the next generation makes similar comments to them. Very limited imagination those people have living in the here and now.
I commiserate with you for your small ‘beddie’, but it doesn’t have to be forever. Pay it off and move to a better place. That’s what I did, although it took me twenty five plus years to do it, but I was aiming higher than I needed to and could have moved earlier. Rent the spare room if you can get anyone willing to move to the edge of town. My first tiny house was three bedroom and I rented out the other two rooms for several years.

You are taking things far too personally here. I understand retirees may be living on land worth a fortune and can’t afford the rate increases and moving older people is always difficult and a place is full of memories, but at the same time their house is worth a bucket load more money also. If they can’t afford the rates, at least under this system they won’t be penalised in stamp duty to move somewhere else. I agree the transition is where its difficult, but if someone came up with a solution rather than just complain about a policy then there would be value in that.
Stamp duty on houses is just a bad taxation policy, kind of like working off a commission, you never quite know how much money you’ll have in your budget and if something affects the local market that is outside the control of the ACT Gov, then the government loses revenue, gets a deficit in the budget and go into debt. Its safe to say most people want a guaranteed income stream, which is what this government policy is about.

Rates might triple, but I bet they would have at least doubled regardless under either government.

“You are taking things far too personally here.” Of course I am likely to take it personally when some write that empty rooms are a waste and I should sell up and move to a unit and let (younger) people have my house. If they had just said that those that can’t afford rate increases should move that would have been one thing, but older people were singled out. As though retired people don’t have use for a study (maybe still working part-time from home), which is what one of my bedrooms is used for, or have family and friends come to stay at times. I too like to be able to cycle or walk to my destination, grow a vegetable garden and fruit trees to be as self sustainable as I can be food wise, which is actually putting the land to a productive use. A lot of the arguments are about ‘wasted’ bedrooms. I haven’t heard any argument about wasted land with an oversized, energy hungry house built on it. I built an energy efficient house, small by today’s standards, and the resulting available land will be used more productively than most gardens. The trend is when younger people buy and redevelop an established house, where once sat a modest house, it is replaced with a giant house that goes from boundary to boundary with very little land left. Let’s shift the discussion of waste from older people living in houses, to the waste that modern families (smaller than in the past) and couples are creating by building these huge energy hungry houses. Perhaps there should be two families in the bigger ones, or this is a waste. By the way, I can likely afford the rate increases.

HiddenDragon HiddenDragon 4:58 pm 24 Jun 14

dungfungus said :

HiddenDragon said :

aussieboy said :

Abolishing stamp duty is very good policy.

You should not be rewarded for staying in the same house for 20 years – if anything you should be punished. There are far too many retired couples living in 4-5 bedroom houses in Canberra’s inner suburbs. Meanwhile, young families are pushed into the abysses of Tuggeranong and Gunghalin where facilities/services are lacking.

If retirees can’t afford the new rates, they should move into a smaller place.

In the long term, this won’t be an issue – basic economics suggests that house prices will fall to compensate for the PV of increased rates – people will just need to factor rate costs into their affordability calculations.

This policy isn’t going to make things any better for the young families who are currently “being pushed into the abysses of Tuggeranong and Gunghalin where facilities/services are lacking” – they’ll still be heading in that direction, and just paying a bit less for stamp duty when they buy, and somewhat more each year, for rates, for ever after. The desirable houses in desirable inner suburbs will continue to go to people with deep pockets – all this policy will do is make the total cost of buying such houses a bit lower if it’s a buyer’s market, and the seller’s net proceeds a bit higher if it’s a seller’s market.

If the ACT Government really cared about housing affordability they would take a different approach to the zoning, pricing and release of land – but they are heavily dependent on land revenues and cannot afford to do so.

The real financial issue at the heart of all of this is the level and sustainability of ACT Government spending, not how the land revenue component of funding for it is derived. The arguments about the supposed economic efficiency and fairness of the rates/stamp duty trade off is ultimately just diverting window dressing (“it has to be paid for somehow, so let’s not engage in selfish debates about who pays what”) and a quite clever exercise in divide and rule.

Aren’t the young still getting a first new home owner’s grant? This is ontop of stamp duty concessions.
This is something older Canberrans never got yet who do you think is subsidising this?
If you claim the new policies are not making things any better for the young then what are the policies doing for us at the other end of the scale?

Others have already made the point – which I share – that the FHOG tends to be of more benefit to the seller, than the buyer – unless it’s a truly saturated buyers’ market. That’s why I think the spin about the new rates system assisting with housing access and affordability is just that – spin – the beneficiaries will tend to be sellers (particularly the investor/flipper category). Likewise, I think the main beneficiaries of the phasing out of stamp duty on insurance policies will be the insurance companies and their shareholders – not the policyholders.

My understanding is that FHOGs – in some shape or form, and with varying values in real terms – have been around for a long time, so there would surely be plenty of older people who would have received such assistance, not just the current generation of first home buyers. I’m sure there’s scope for debate about the real or relative value of past FHOGs, and there may have been periods when it didn’t apply at all but, as I say, it’s not exactly a novel idea.

I don’t think I’ve ever suggested that the new rates system is doing anything for people (as you put it) “at the other end of the scale” – I’ve been a consistent critic of it for the reasons summarised in my previous post. That said, I thought there was something in the recent Budget about extending stamp duty concessions for seniors(?) – not relevant to me, so I didn’t explore the details, but others may find it useful to do so.

VYBerlinaV8_is_back VYBerlinaV8_is_back 4:24 pm 24 Jun 14

watto23 said :

Rates might triple, but I bet they would have at least doubled regardless under either government.

Drawing a long bow. I suspect the ‘others’ would have cut spending rather than increasing taxation. Whether or not this would help overall is another matter.

That said, not paying for the new train set would go a long way toward getting our financial predicament back under control.

watto23 watto23 4:15 pm 24 Jun 14

Maya123 said :

Watson said :

The only place I could afford to buy was a brand new 2 beddie on the very edge of town. Not only was it significantly cheaper than any other house for sale at the time, I also only had to pay a deposit on the land, not on the combined value of land and house.

Do I think I deserve to get cheaper rates as compensation for living there? Hell yeah! It’s a sh!thole.

So stop your complaining about your high rates in the Inner North or South. At least you can save money by cycling places or strolling to your local shops. You might even be able to take a bus to work and save on petrol and parking. You have parks and ovals you can walk to and good places to walk your dog. If you don’t like paying for those privileges, I’m putting up my house for sale in a few months time. You are more than welcome to put a bid on my shoebox and my rates are only about $1,000.

What my main gripe is with, is people here suggesting because I’m older I should sell my house (which I only moved into a year ago after saving for it for over twenty years) and move into a one bedroom unit. I liked Old Canberrean’s comment, “I suppose you are thinking of something small and comfortable like a coffin. What a ridiculous and heartless suggestion.”
No, I’m keeping my house, despite a certain section of the correspondents here believing anyone over a certain age is better ‘packed’ away, and the houses made available to real people. Those same people will be at retirement age one day and how will they feel then when the next generation makes similar comments to them. Very limited imagination those people have living in the here and now.
I commiserate with you for your small ‘beddie’, but it doesn’t have to be forever. Pay it off and move to a better place. That’s what I did, although it took me twenty five plus years to do it, but I was aiming higher than I needed to and could have moved earlier. Rent the spare room if you can get anyone willing to move to the edge of town. My first tiny house was three bedroom and I rented out the other two rooms for several years.

You are taking things far too personally here. I understand retirees may be living on land worth a fortune and can’t afford the rate increases and moving older people is always difficult and a place is full of memories, but at the same time their house is worth a bucket load more money also. If they can’t afford the rates, at least under this system they won’t be penalised in stamp duty to move somewhere else. I agree the transition is where its difficult, but if someone came up with a solution rather than just complain about a policy then there would be value in that.
Stamp duty on houses is just a bad taxation policy, kind of like working off a commission, you never quite know how much money you’ll have in your budget and if something affects the local market that is outside the control of the ACT Gov, then the government loses revenue, gets a deficit in the budget and go into debt. Its safe to say most people want a guaranteed income stream, which is what this government policy is about.

Rates might triple, but I bet they would have at least doubled regardless under either government.

watto23 watto23 4:05 pm 24 Jun 14

bikhet said :

watto23 said :

I don’t see how this policy is unfair.

It is unfair because, as others have pointed out, existing owners have already paid the stamp duty and so the changed rating arrangements should affect their properties until the blocks are sold.

It may be more efficient, it may be necessary to fund better services, but it is unfair.

Yes I’m in this boat as well I paid stamp duty on my place, but how else are they going to change the policy. It is being done over 20 years which sounds very reasonable to me.
Rates are always going to rise as well. Its reasonably fair solution to a bad taxation policy which is stamp duty. If they just removed stamp duty overnight, its not fair to those who just bought either. And an instant rates hike would bankrupt people.

Its extremely fair on people when say they run into some financial trouble and decide to sell, they’ll have no stamp duty to pay and why should they pay to sell or buy another house. You should pay for your choice of land based on size and location and that is very fair.

So I understand while its unfair to those of us who paid stamp duty, ultimately it will be much fairer system.

chewy14 chewy14 1:45 pm 24 Jun 14

justin heywood said :

chewy14 said :

1. A government is not the same as a household. It’s good economics to borrow for needed infrastructure during downtimes, particularly with interest rates so low at the moment. Whether the proposed infrastructure is a good long term investment is another matter.

OK, I’ll stop you on this first point. Correct, a government is not the same as a household; a business would be a better analogy. And a business that is already spending more than it earns – with a serious prospect of harder times to come, does not resolve to relieve the pressure by spending even more. It is not good economics, except maybe for the green/Left.

And ‘needed’ infrastructure? Given that light rail is the major item, who has decided that this is what’s needed? Do you think anyone outside of the relevant politicians would have come up with the current plan? Do you think they support it because it’s ‘needed’ infrastructure?

Nobody on the government side is telling the truth, which is why their message is so confused. The whole dog and pony show is about Assembly politics, not ‘good economics’, not ‘needed infrastructure’ not anything else.

So you would prefer governments that acted pro-cyclical when it came to spending? I’m pretty sure that economists of most persuasions would disagree with you.

The argument isn’t about whether debt is always bad, and if you think it is, this conversation is over. The argument is whether the proposed infrastructure spending is actually “good” debt that will deliver long term benefits.

Saying things like ” cut your spending to meet revenue” is meaningless in this context. Saying things like the proposed infrastructure won’t provide the predicted benefits or would be better spent on other projects is reasonable and fair.

Maya123 Maya123 12:51 pm 24 Jun 14

Watson said :

The only place I could afford to buy was a brand new 2 beddie on the very edge of town. Not only was it significantly cheaper than any other house for sale at the time, I also only had to pay a deposit on the land, not on the combined value of land and house.

Do I think I deserve to get cheaper rates as compensation for living there? Hell yeah! It’s a sh!thole.

So stop your complaining about your high rates in the Inner North or South. At least you can save money by cycling places or strolling to your local shops. You might even be able to take a bus to work and save on petrol and parking. You have parks and ovals you can walk to and good places to walk your dog. If you don’t like paying for those privileges, I’m putting up my house for sale in a few months time. You are more than welcome to put a bid on my shoebox and my rates are only about $1,000.

What my main gripe is with, is people here suggesting because I’m older I should sell my house (which I only moved into a year ago after saving for it for over twenty years) and move into a one bedroom unit. I liked Old Canberrean’s comment, “I suppose you are thinking of something small and comfortable like a coffin. What a ridiculous and heartless suggestion.”
No, I’m keeping my house, despite a certain section of the correspondents here believing anyone over a certain age is better ‘packed’ away, and the houses made available to real people. Those same people will be at retirement age one day and how will they feel then when the next generation makes similar comments to them. Very limited imagination those people have living in the here and now.
I commiserate with you for your small ‘beddie’, but it doesn’t have to be forever. Pay it off and move to a better place. That’s what I did, although it took me twenty five plus years to do it, but I was aiming higher than I needed to and could have moved earlier. Rent the spare room if you can get anyone willing to move to the edge of town. My first tiny house was three bedroom and I rented out the other two rooms for several years.

Watson Watson 12:12 pm 24 Jun 14

The only place I could afford to buy was a brand new 2 beddie on the very edge of town. Not only was it significantly cheaper than any other house for sale at the time, I also only had to pay a deposit on the land, not on the combined value of land and house.

Do I think I deserve to get cheaper rates as compensation for living there? Hell yeah! It’s a sh!thole.

So stop your complaining about your high rates in the Inner North or South. At least you can save money by cycling places or strolling to your local shops. You might even be able to take a bus to work and save on petrol and parking. You have parks and ovals you can walk to and good places to walk your dog. If you don’t like paying for those privileges, I’m putting up my house for sale in a few months time. You are more than welcome to put a bid on my shoebox and my rates are only about $1,000.

Maya123 Maya123 11:51 am 24 Jun 14

watto23 said :

Maya123 said :

rommeldog56 said :

I should have included context :

1) Tuggeranong
2) An “average” location in an “average” Tuggers suburb – not Fadden, Monash or Gowrie.
3)And I suppose this is the killer – a 948sm block – which is common in a suburb established 24 years or so ago.

640sq m block. Typical size (Lower) Narrabundah. Rates 2014 $2266. (Established 50 – 60 years ago.) A previous house, also in Narrabundah, which I sold a year ago, had only slightly lower rates. That house’s block was about 460 (possibly a bit less) sq ms. That small 99sq m fibro house would definitely have been worth much less than most houses in Tuggeranong, had a smaller block, but still higher rates.

You have both highlighted why the new tax system is better, because people who want to either have larger blocks of land or live closer to the city pay for that privelege.
No body is forcing anyone to move houses, but making it easier to downsize or upsize when needed. My parents downsized happily after 25+ years in a 4bedroom house on a battleaxe block to something smaller because they didn’t want to look after the large block of land and the extra space. Others might be happy to do so, but relying on people moving houses is a bad way to tax people and unfair overall.
The money was always going to come from somewhere and the Liberals like their federal counterparts haven’t exactly put up any other ideas have they?
The rates policy is similar to how rego is done, the bigger the vehicle the more you pay. In fact its a very Liberal idea that people pay for what they want/use. I don’t see how this policy is unfair.
It may be unfair if you want to have a large block land close to the city and unwilling to pay for it. As for growing vegetables, I can grow them in my small courtyard townhouse, my rates are under $1k a year as well. Under the new system you have a choice, nobody is forcing you to do anything. As the liberals would say, live within your means and end the age of entitlement, which is exactly what this labor policy is doing.

“I can grow them in my small courtyard townhouse”.
I think it’s wonderful when people utilise the space they have, even if it’s only a balcony, but unless it’s a very big courtyard I doubt you can grow most/all of your vegetables, for use fresh and to store for winter use, such as potatoes, pumpkins, beans (to dry), chillies (dried), etc. Plus frozen vegetables. Then what about fruit trees, vines and bushes? I do hunt for feral fruit, but the variety is limited (usually to plums, blackberries and apples) and so I like to grow my own too. I eat it fresh, but I also bottle the fruit for all year use. I have many shelves covered with bottled fruit. I couldn’t grow all this in a typical courtyard.
You also say you live in a townhouse, but some here are suggesting that older people like me should live in a one bedroom unit. That has no garden, and the neighbours might smoke. Having visited people in flats (nice ones too) if someone smokes in a nearby flat, I noticed the smoke smell in my non-smoking friends flat too. Until flats are non-smoking, no thank you. The example I am thinking of the visitors could smell the smoke and commented on it, but the owner couldn’t. I guess they had become accustomed to the smell, but that didn’t make it any less healthy.

justin heywood justin heywood 11:47 am 24 Jun 14

chewy14 said :

1. A government is not the same as a household. It’s good economics to borrow for needed infrastructure during downtimes, particularly with interest rates so low at the moment. Whether the proposed infrastructure is a good long term investment is another matter.

OK, I’ll stop you on this first point. Correct, a government is not the same as a household; a business would be a better analogy. And a business that is already spending more than it earns – with a serious prospect of harder times to come, does not resolve to relieve the pressure by spending even more. It is not good economics, except maybe for the green/Left.

And ‘needed’ infrastructure? Given that light rail is the major item, who has decided that this is what’s needed? Do you think anyone outside of the relevant politicians would have come up with the current plan? Do you think they support it because it’s ‘needed’ infrastructure?

Nobody on the government side is telling the truth, which is why their message is so confused. The whole dog and pony show is about Assembly politics, not ‘good economics’, not ‘needed infrastructure’ not anything else.

Maya123 Maya123 11:09 am 24 Jun 14

Canberroid said :

Maya123 said :

Canberroid said :

dungfungus said :

Aren’t the young still getting a first new home owner’s grant? This is ontop of stamp duty concessions.
This is something older Canberrans never got yet who do you think is subsidising this?

You only get that if you buy a brand new home, and given that shoddy houses on tiny blocks on the outskirts cost $800k, it’s not much of a concession.

Older Canberrans didn’t face the current ridiculous realestate prices; in fact they benefitted from it and helped make it happen.

If you think a house costing $800,000 on the outskirts is shoddy, you must have had a very spoilt upbringing, and an inflated sense of entitlement. A more realist price $499,000 – the first house I checked. There might be cheaper: http://www.allhomes.com.au/ah/act/sale-residential/37-helen-leonard-crescent-forde-canberra/1316906749411

Neither spoilt or entitled, but thanks anyway. I just wouldn’t pay $500k for a new house on a 325sqm block with eaves that touch the neighbour on one side and are beneath the two storey neighbour on the other side, even if it wasn’t all the way out in Forde. Good luck getting any sun in that place at all – abysmal planning.

Yes, houses are being built far bigger than in the past. A typical two or three bedroom house that was built fifty years ago would likely fit better, but the insulation would probably be non-existent then and the older house a lot colder and more expensive to heat than the modern house. My first three bedroom house, built in the 1950s was 9.9 squares (about 99sq m?). Initially it had no insulation, but by the time I bought it it had thin batts in the ceiling. But I was a young first home buyer; I could handle temperatures at times down to 3C inside. It gets harder for the older person. Modern houses, even unheated, with their better insulation would be unlikely to get as cold. I think the planning of new suburbs is abysmal. The streets and house blocks need to be planned to allow good solar orientation and access to an address by road should not need to involve winding in and out of streets all over suburbs using up petrol. There’s a lot to be said for the old grid street pattern. And this doesn’t mean than interesting open spaces can’t be incorporated. This pattern (with parks, etc included) makes driving more direct and allows for solar access, but no, this is so old fashioned for modern planning. With good planning, and house sizes not built to ridiculous dimensions (households/families these days tend to be smaller than households in the past too) a smaller block can have good solar access.
I live in a solar house now and as I write this on this cold, wet day I have no need of a heater and have none going, but my first house was a cold fibro box, much worse than the houses you are rejecting. (My solar house by the way is about half the size of most new houses built today.) If I were looking to buy a first home on a limited size block, I would look at the smaller houses that allowed more room for a vegetable garden, even if it had to be the front garden, and that faced north. Then I would live very frugally, rent out any spare rooms, pay it off as quickly as I could, save and look to move.

Maya123 Maya123 10:43 am 24 Jun 14

JC said :

Maya123 said :

Canberroid said :

dungfungus said :

Aren’t the young still getting a first new home owner’s grant? This is ontop of stamp duty concessions.
This is something older Canberrans never got yet who do you think is subsidising this?

You only get that if you buy a brand new home, and given that shoddy houses on tiny blocks on the outskirts cost $800k, it’s not much of a concession.

Older Canberrans didn’t face the current ridiculous realestate prices; in fact they benefitted from it and helped make it happen.

If you think a house costing $800,000 on the outskirts is shoddy, you must have had a very spoilt upbringing, and an inflated sense of entitlement. A more realist price $499,000 – the first house I checked. There might be cheaper: http://www.allhomes.com.au/ah/act/sale-residential/37-helen-leonard-crescent-forde-canberra/1316906749411

The first, cheapest and ONLY house you checked I would say. A more realistic price for Forde, going by all places on offer is closer to $700-$750kk, which is a surprise because a year back $800k for Forde would have been about right.

Forde homes advertised for sale for under $700,000. There are more for sale under this price than over this price, and even more places available if townhouses are included. Some of these houses are huge. If you have eliminated these houses as below what you would consider you have very inflated ideas of what makes a first home buyers house. In these suburbs it is usually first home buyers buying. I am not saying these prices would be easy for first home buyers, but to say houses are not available for under $700,000 (reduced from the initial statement of $800,000) is a mistruth and ignorant.
$439,950
http://www.allhomes.com.au/ah/act/sale-residential/forde/121485110
$495,000 (classified a townhouse, but looks like a house)
http://www.allhomes.com.au/ah/act/sale-residential/6-12-lomax-street-forde-canberra/1316894060811
$499,000
http://www.allhomes.com.au/ah/act/sale-residential/37-helen-leonard-crescent-forde-canberra/1316906749411
$534,950
http://www.allhomes.com.au/ah/act/sale-residential/7-callus-street-forde-canberra/1316830665011
$549,950
http://www.allhomes.com.au/ah/act/sale-residential/100-blizzard-circuit-forde-canberra/1316792422011
$564,950
http://www.allhomes.com.au/ah/act/sale-residential/1-26-loma-rudduck-street-forde-canberra/1316905058411
$575,000
http://www.allhomes.com.au/ah/act/sale-residential/133-amy-ackman-street-forde-canberra/1316908891311
$580,000
http://www.allhomes.com.au/ah/act/sale-residential/26-zakharov-avenue-forde-canberra/1316847032911
$599,000
$625,000-$650,000
http://www.allhomes.com.au/ah/act/sale-residential/no-street-name-provided-forde-canberra/1316812391011
$680,000+
http://www.allhomes.com.au/ah/act/sale-residential/36-beveridge-crescent-forde-canberra/1316907445111
$690,000+
http://www.allhomes.com.au/ah/act/sale-residential/6-volpato-street-forde-canberra/1316905535511

chewy14 chewy14 9:46 am 24 Jun 14

rommeldog56 said :

watto23 said :

Maya123 said :

rommeldog56 said :

I should have included context :

1) Tuggeranong
2) An “average” location in an “average” Tuggers suburb – not Fadden, Monash or Gowrie.
3)And I suppose this is the killer – a 948sm block – which is common in a suburb established 24 years or so ago.

640sq m block. Typical size (Lower) Narrabundah. Rates 2014 $2266. (Established 50 – 60 years ago.) A previous house, also in Narrabundah, which I sold a year ago, had only slightly lower rates. That house’s block was about 460 (possibly a bit less) sq ms. That small 99sq m fibro house would definitely have been worth much less than most houses in Tuggeranong, had a smaller block, but still higher rates.

You have both highlighted why the new tax system is better, because people who want to either have larger blocks of land or live closer to the city pay for that privelege.
No body is forcing anyone to move houses, but making it easier to downsize or upsize when needed. My parents downsized happily after 25+ years in a 4bedroom house on a battleaxe block to something smaller because they didn’t want to look after the large block of land and the extra space. Others might be happy to do so, but relying on people moving houses is a bad way to tax people and unfair overall.
The money was always going to come from somewhere and the Liberals like their federal counterparts haven’t exactly put up any other ideas have they?
The rates policy is similar to how rego is done, the bigger the vehicle the more you pay. In fact its a very Liberal idea that people pay for what they want/use. I don’t see how this policy is unfair.
It may be unfair if you want to have a large block land close to the city and unwilling to pay for it. As for growing vegetables, I can grow them in my small courtyard townhouse, my rates are under $1k a year as well. Under the new system you have a choice, nobody is forcing you to do anything. As the liberals would say, live within your means and end the age of entitlement, which is exactly what this labor policy is doing.

Geez watto23, a few points of difference if i may :

(i) “live within your means ” ?

Like, what the ACT Government is doing with its massive debt plan. Oh, that “means” !

(ii) “no body is forcing anyone to move house”. Huh. You have to be kidding !

Many will have no choice – because this is being applied retrospectively to those who have already paid stamp duty and have no doubt planned to meet their expenses in retirement. Now this – out of the blue.

(iii) Good on those who downsize voluntarily – if they can afford to do that.

What happens when Annual Rates on the traditional larger block in the burbs is so expensive that property prices drop. So downsizers – “forced” into that by the tripling of Annual Rates, have much less equity to harness in order to buy something smaller, perhaps close to the route of the toy train set. Conversely, the cost of smaller properties (with less expensive Annual Rates) will increase. Its not a good outlook, is it. No – you don’t have choice actually.

(iv) At the end of the day, I think “HiddenDragon” has a good point :

“The real financial issue at the heart of all of this is the level and sustainability of ACT Government spending, not how the land revenue component of funding for it is derived. The arguments about the supposed economic efficiency and fairness of the rates/stamp duty trade off is ultimately just diverting window dressing (“it has to be paid for somehow, so let’s not engage in selfish debates about who pays what”) and a quite clever exercise in divide and rule.”

1. A government is not the same as a household. It’s good economics to borrow for needed infrastructure during downtimes, particularly with interest rates so low at the moment. Whether the proposed infrastructure is a good long term investment is another matter.

2. If you can’t afford the rates, and don’t want to move you could always take out a reverse mortgage on the property. Its nearly certain however, that at some stage in the future you will move and this policy will help you do so.

3. I’m assuming that you are also complaining about the various government policies that have been designed to underpin and grow your property’s value? No?
Either way, if inner city property prices drop, its highly likely that the “downsizer” properties will also drop. I don’t know why you would assume they would rise?

4. Yes how the government spends our money is the real issue and you should focus your anger on specific spending items that you don’t agree with instead of complaining about a sensible change in taxation policy.

Canberroid Canberroid 11:14 pm 23 Jun 14

Maya123 said :

Canberroid said :

dungfungus said :

Aren’t the young still getting a first new home owner’s grant? This is ontop of stamp duty concessions.
This is something older Canberrans never got yet who do you think is subsidising this?

You only get that if you buy a brand new home, and given that shoddy houses on tiny blocks on the outskirts cost $800k, it’s not much of a concession.

Older Canberrans didn’t face the current ridiculous realestate prices; in fact they benefitted from it and helped make it happen.

If you think a house costing $800,000 on the outskirts is shoddy, you must have had a very spoilt upbringing, and an inflated sense of entitlement. A more realist price $499,000 – the first house I checked. There might be cheaper: http://www.allhomes.com.au/ah/act/sale-residential/37-helen-leonard-crescent-forde-canberra/1316906749411

Neither spoilt or entitled, but thanks anyway. I just wouldn’t pay $500k for a new house on a 325sqm block with eaves that touch the neighbour on one side and are beneath the two storey neighbour on the other side, even if it wasn’t all the way out in Forde. Good luck getting any sun in that place at all – abysmal planning.

rommeldog56 rommeldog56 11:06 pm 23 Jun 14

watto23 said :

Maya123 said :

rommeldog56 said :

I should have included context :

1) Tuggeranong
2) An “average” location in an “average” Tuggers suburb – not Fadden, Monash or Gowrie.
3)And I suppose this is the killer – a 948sm block – which is common in a suburb established 24 years or so ago.

640sq m block. Typical size (Lower) Narrabundah. Rates 2014 $2266. (Established 50 – 60 years ago.) A previous house, also in Narrabundah, which I sold a year ago, had only slightly lower rates. That house’s block was about 460 (possibly a bit less) sq ms. That small 99sq m fibro house would definitely have been worth much less than most houses in Tuggeranong, had a smaller block, but still higher rates.

You have both highlighted why the new tax system is better, because people who want to either have larger blocks of land or live closer to the city pay for that privelege.
No body is forcing anyone to move houses, but making it easier to downsize or upsize when needed. My parents downsized happily after 25+ years in a 4bedroom house on a battleaxe block to something smaller because they didn’t want to look after the large block of land and the extra space. Others might be happy to do so, but relying on people moving houses is a bad way to tax people and unfair overall.
The money was always going to come from somewhere and the Liberals like their federal counterparts haven’t exactly put up any other ideas have they?
The rates policy is similar to how rego is done, the bigger the vehicle the more you pay. In fact its a very Liberal idea that people pay for what they want/use. I don’t see how this policy is unfair.
It may be unfair if you want to have a large block land close to the city and unwilling to pay for it. As for growing vegetables, I can grow them in my small courtyard townhouse, my rates are under $1k a year as well. Under the new system you have a choice, nobody is forcing you to do anything. As the liberals would say, live within your means and end the age of entitlement, which is exactly what this labor policy is doing.

Geez watto23, a few points of difference if i may :

(i) “live within your means ” ? Like, what the ACT Government is doing with its massive debt plan. Oh, that “means” !

(ii) “no body is forcing anyone to move house”. Huh. You have to be kidding ! Many will have no choice – because this is being applied retrospectively to those who have already paid stamp duty and have no doubt planned to meet their expenses in retirement. Now this – out of the blue.

(iii) Good on those who downsize voluntarily – if they can afford to do that. What happens when Annual Rates on the traditional larger block in the burbs is so expensive that property prices drop. So downsizers – “forced” into that by the tripling of Annual Rates, have much less equity to harness in order to buy something smaller, perhaps close to the route of the toy train set. Conversely, the cost of smaller properties (with less expensive Annual Rates) will increase. Its not a good outlook, is it. No – you don’t have choice actually.

(iv) At the end of the day, I think “HiddenDragon” has a good point :

“The real financial issue at the heart of all of this is the level and sustainability of ACT Government spending, not how the land revenue component of funding for it is derived. The arguments about the supposed economic efficiency and fairness of the rates/stamp duty trade off is ultimately just diverting window dressing (“it has to be paid for somehow, so let’s not engage in selfish debates about who pays what”) and a quite clever exercise in divide and rule.”

dungfungus dungfungus 10:39 pm 23 Jun 14

Maya123 said :

Canberroid said :

dungfungus said :

Aren’t the young still getting a first new home owner’s grant? This is ontop of stamp duty concessions.
This is something older Canberrans never got yet who do you think is subsidising this?

You only get that if you buy a brand new home, and given that shoddy houses on tiny blocks on the outskirts cost $800k, it’s not much of a concession.

Older Canberrans didn’t face the current ridiculous realestate prices; in fact they benefitted from it and helped make it happen.

If you think a house costing $800,000 on the outskirts is shoddy, you must have had a very spoilt upbringing, and an inflated sense of entitlement. A more realist price $499,000 – the first house I checked. There might be cheaper: http://www.allhomes.com.au/ah/act/sale-residential/37-helen-leonard-crescent-forde-canberra/1316906749411

Young people can only afford to buy new homes because the concessions discussed give them the leverage ratio to borrow the amount they need to complete the transaction. It’s how the Government keeps the developers (who have to buy land from the LDA) in business you know.

JC JC 10:13 pm 23 Jun 14

Maya123 said :

Canberroid said :

dungfungus said :

Aren’t the young still getting a first new home owner’s grant? This is ontop of stamp duty concessions.
This is something older Canberrans never got yet who do you think is subsidising this?

You only get that if you buy a brand new home, and given that shoddy houses on tiny blocks on the outskirts cost $800k, it’s not much of a concession.

Older Canberrans didn’t face the current ridiculous realestate prices; in fact they benefitted from it and helped make it happen.

If you think a house costing $800,000 on the outskirts is shoddy, you must have had a very spoilt upbringing, and an inflated sense of entitlement. A more realist price $499,000 – the first house I checked. There might be cheaper: http://www.allhomes.com.au/ah/act/sale-residential/37-helen-leonard-crescent-forde-canberra/1316906749411

The first, cheapest and ONLY house you checked I would say. A more realistic price for Forde, going by all places on offer is closer to $700-$750kk, which is a surprise because a year back $800k for Forde would have been about right.

Maya123 Maya123 8:12 pm 23 Jun 14

Canberroid said :

dungfungus said :

Aren’t the young still getting a first new home owner’s grant? This is ontop of stamp duty concessions.
This is something older Canberrans never got yet who do you think is subsidising this?

You only get that if you buy a brand new home, and given that shoddy houses on tiny blocks on the outskirts cost $800k, it’s not much of a concession.

Older Canberrans didn’t face the current ridiculous realestate prices; in fact they benefitted from it and helped make it happen.

If you think a house costing $800,000 on the outskirts is shoddy, you must have had a very spoilt upbringing, and an inflated sense of entitlement. A more realist price $499,000 – the first house I checked. There might be cheaper: http://www.allhomes.com.au/ah/act/sale-residential/37-helen-leonard-crescent-forde-canberra/1316906749411

chewy14 chewy14 7:40 pm 23 Jun 14

dungfungus said :

HiddenDragon said :

aussieboy said :

Abolishing stamp duty is very good policy.

You should not be rewarded for staying in the same house for 20 years – if anything you should be punished. There are far too many retired couples living in 4-5 bedroom houses in Canberra’s inner suburbs. Meanwhile, young families are pushed into the abysses of Tuggeranong and Gunghalin where facilities/services are lacking.

If retirees can’t afford the new rates, they should move into a smaller place.

In the long term, this won’t be an issue – basic economics suggests that house prices will fall to compensate for the PV of increased rates – people will just need to factor rate costs into their affordability calculations.

This policy isn’t going to make things any better for the young families who are currently “being pushed into the abysses of Tuggeranong and Gunghalin where facilities/services are lacking” – they’ll still be heading in that direction, and just paying a bit less for stamp duty when they buy, and somewhat more each year, for rates, for ever after. The desirable houses in desirable inner suburbs will continue to go to people with deep pockets – all this policy will do is make the total cost of buying such houses a bit lower if it’s a buyer’s market, and the seller’s net proceeds a bit higher if it’s a seller’s market.

If the ACT Government really cared about housing affordability they would take a different approach to the zoning, pricing and release of land – but they are heavily dependent on land revenues and cannot afford to do so.

The real financial issue at the heart of all of this is the level and sustainability of ACT Government spending, not how the land revenue component of funding for it is derived. The arguments about the supposed economic efficiency and fairness of the rates/stamp duty trade off is ultimately just diverting window dressing (“it has to be paid for somehow, so let’s not engage in selfish debates about who pays what”) and a quite clever exercise in divide and rule.

Aren’t the young still getting a first new home owner’s grant? This is ontop of stamp duty concessions.
This is something older Canberrans never got yet who do you think is subsidising this?
If you claim the new policies are not making things any better for the young then what are the policies doing for us at the other end of the scale?

You seem to be under the misapprehension that first home owners grants actually help first home buyers rather than vendors. These types of policies only serve to prop up the housing market for existing owners.

And anyone who can’t think of policies designed to help older people or existing home owners, isn’t really thinking that hard. Generous tax treatment, those home “vendor” grants, restricted land release, tighter planning controls etc. All designed to maintain value for existing property owners

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